Published: Wed, March 14, 2018
Culture | By Stewart Greene

CPI, IIP data beat estimates

CPI, IIP data beat estimates

Both the main consumer price index and the core gauge, which excludes food and energy, rose 0.2% from January, matching the median estimates of economists, a Labor Department report showed Tuesday.

In February, consumer food price index softened to 3.26 per cent as against 4.7 per cent in January.

Strong inflation numbers in January had sparked fears that price pressures were accelerating, leading financial markets to expect a more aggressive pace of interest rate increases from the Federal Reserve than is now anticipated. Moreover, core inflation is sticky at around 5 percent, while an imposition of more tariffs on some imports like mobile phones is likely to boost price pressures, giving the RBI more ammunition to wait and watch.

US consumer prices continued to firm in February, indicating inflation is creeping up toward the Federal Reserve's target without the kind of breakout that would warrant a faster pace of interest-rate hikes. The consumer price inflation could be below 5 percent for the next two months followed by a rebound to 5.8-5.9 percent. (NASDAQ: NFLX) +4.5 percent, Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) +3 percent, Microsoft Corporation (NASDAQ: MSFT) +2.2 percent, Inc (NASDAQ: AMZN) +1.75, Apple Inc (NASDAQ: AAPL) +1.7, and Facebook Inc (NASDAQ: FB) +1.6 percent.

"We expect the RBI to allude to possible policy tightening at the next meeting in early April, as the concerns on growth slide", Prakash Sakpal, ING Asia economist in Singapore, said in a note published before Monday's data release. Inflation for the fuel and light category was at 6.80 per cent in February against 7.73 per cent in January.

CSO stated that, the General Index for the month of January 2018 stands at 132.3, which is 7.5% higher as compared to the level in the month of January 2017.

The IIP growth in January this year was mainly on account of uptick in manufacturing sector, which constitutes of 77.63 per cent of the index. From 5.1 percent in January it comes down to 4.4 percent. The pick-up will be due to rising consumption demand, impact of house rent allowance revisions on housing inflation, and higher global crude oil prices.

Index of Industrial Production (IIP) or factory output for the month of January 2018 jumped by 7.5% - higher compared to previous month in December 2017 where it stood at 7.1%, however the indicator was lower compared to 5-year mark of 8.8% in the month of November 2017.

The brokerage house believes that most month on month decline came from food, as expected. IIP grew at 4.1 per cent in April-January this fiscal as compared to 5 per cent in same period in previous financial year.

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